Loans & payments
Equipment loan vs lease calculator
Compare what equipment really costs over the same term: buying it with a loan, or leasing it — with buyout and resale value counted.
How this is calculated
Loan cost = down payment + payments − resale value · Lease cost = lease payments (+ buyout − resale value)
The loan payment uses the standard amortizing formula on the price minus the down payment. Resale value only counts when you own the equipment at the end — always with a loan, and with a lease only if you buy it out.
Worked example
$80,000 of equipment with $8,000 down at 9% over 5 years is $1,494.60 a month. With $20,000 of resale value at the end, the loan costs $77,676.09 overall. A $1,650-a-month lease for the same 5 years costs $99,000 and leaves nothing to sell, so the loan is $21,323.91 cheaper.
Assumptions
- The same term for the loan and the lease, with monthly payments.
- Before taxes. Section 179 deductions, depreciation and lease write-offs can change the answer — ask your accountant.
- Maintenance, insurance and sales tax are not included; some leases bundle them.
- Resale value is your own estimate, so use a cautious number.
Questions owners ask
Is it better to lease or buy equipment?
It depends on how long you will use it and what it is worth at the end. Buying usually costs less for equipment that holds its value and outlasts the term; leasing can suit equipment that dates quickly, or when you want to keep cash up front.
What is a $1 buyout lease?
A lease where you can buy the equipment for $1 at the end. It works much like a loan: enter 1 as the buyout and the calculator counts the resale value as yours.
Do taxes change the comparison?
Often. Purchases may qualify for Section 179 or depreciation deductions, and lease payments may be deductible as expenses. This calculator compares cash costs only, so check the tax side with your accountant.
Read before you borrow
Guides behind the numbers.
01Equipment financing: how to fund productive assets
Learn how equipment financing works, what lenders evaluate, lease vs. loan tradeoffs, down payments, tax questions and responsible deal sizing.
Read the guide ↗
02Business loan rates and costs: what you actually pay
Understand business loan rates, APR, factor rates, fees, payment frequency and total repayment so you can compare financing offers accurately.
Read the guide ↗
03How to choose the right financing for the job
Learn how to choose business financing by matching the use of funds, repayment structure, timing and risk to your company’s cash-flow cycle.
Read the guide ↗Calculators give estimates for educational purposes only. They are not an offer, approval or commitment to lend. Actual rates, fees, terms and payments are set by independent providers and depend on their review. ScaleKit Financing is operated by Arch Ventures LLC and is not a lender.